On February 18, 2013, the LA Times headline read “Health law may prove costly at first.” Although it’s a good article over all, it still downplays the extent of the rate increases to be seen in 2014. Noam Levey (noam.levey@latimes.com) writes that although many are concerned about affordability as the law that we all must be insured looms ever closer, “administration officials…cite provisions in the law that they say will hold down premiums, including new competitive markets they believe will make insurers offer competitive rates. Exactly how high the premiums may go won’t be known until later this year.” Even with this optimism, she says, “officials in states that support the law have sounded warnings that some people – mostly those who are young and do not receive coverage through their work – may see considerably higher prices than expected. That is because of new requirements in the law aimed at making insurance more comprehensive and more affordable for older, sicker consumers…If that happens, young, healthy people could elect not to get health insurance and pay the small penalty in the law for not having coverage.”

Ms. Levey further states that “Insurance regulators in California, which has enthusiastically embraced the law, cautioned the Obama administrationin a recent letter about ‘rate and market disruption.'” And, as another example of cautious supporters, she says that “A leading advocate for consumers in their 20s, Young Invincibles, sounded a similar caution, suggesting in a letter to administration officials that additional steps may be needed to protect young people from rising premiums. Young Invincibles mobilized in 2010 to help pass the healthcare law.” Of course, she demonstrates, “The law does include many new protections for consumers. Even those now sounding alarms emphasize the importance of those provisions, including guaranteed coverage for Americans with preexisting medical conditions.” And “The new law also is designed to make insurance more affordable for…Millions of Americans who make less than four times the federal poverty level…about $92,000 for a family of four…will qualify for federal subsidies to offset the cost of their premiums if they don’t get insurance through employers.” But, as she correctly points out, “these new protections and benefits — largely intended for Americans who do not get health coverage through their employers — also threaten to drive up costs.”

Ms. Levey notes that “The nonpartisan Congressional Budget Office estimates that insurance premiums for those who buy coverage on their own probably will be 10% to 13% higher in 2016, in large part because health plans will be much more comprehensive. Many consumers will probably pay less, however, because of the subsidies available in the law. The healthcare law also includes a new tax and new fees on insurance companies that the industry says it will pass on to consumers.” She says further states that some state regulators “have asked the administration to phase in the new requirement over several years.” However, “Administration officials have said they cannot postpone the rule because the law requires it to go into effect in 2014. They point to provisions in the law designed to shield consumers in their 20s from higher premiums. Those under 26 can remain on a parent’s plan. The law also includes a slimmed-down health plan for people under 30 that is expected to cost less.”

Ms. Levey quotes others, too, stating that “Other groups have warned that the new package of benefits that insurers must cover may end up being so extensive that policies could become unaffordable.” And, “The American Academy of Ophthalmology, for example, is urging some limits on vision coverage for children. The group supports the law’s requirement that insurance plans cover children’s eye care, but it worries about overuse of comprehensive eye exams on children who may not need them.”

I sure hope the maket settles down. I hope that this is just transition jitters and that things will get calmer. Although for now things still seem quite uncertain, we are here to talk through specific options with you and help you plan the best we can. We look forward to speaking with you soon!

About the Author

Geldin Insurance Services is a family owned and operated business brought to you by George Geldin, RHU LUTCF. George is a member in good standing of the National Association of Insurance and Financial Advisors (NAIFA) and the National Association of Health Underwriters (NAHU). In 2012, for the tenth consecutive year, George was presented with the symbol of NAHU’s highest level of achievement, the Golden Eagle Award, for outstanding work in health insurance sales. Also in 2012, he became A Charter Qualifier For NAHU’s New Highest Recognition, The Soaring Eagle. In addition to individual and group health as well as life insurance, Geldin Insurance Services is a provider of long term care insurance and disability insurance.